What is a QROPS pension?

A QROPS pension stands for Qualifying Recognised Overseas Pension Scheme, and is a special type of pension designed for people who are considering a more permanent move abroad and want to take their pension with them.

Rather than just any old pension scheme based abroad, a QROPS is one that meets special requirements set by HMRC, including that is must have a beneficial owner (usually the pension saver), trustees and that it can receive UK-based pension benefits.

Launched in 2006, QROPS pension schemes could potentially be deemed appropriate for people (primarily expats) who wish to emigrate from the UK and retire abroad, or for somebody who was born outside the UK but has accrued UK based pension benefits and wishes to transfer them abroad.

QROPs, much like SIPPs and SSASs, can also be used to make a wide range of investments too, but this can have its own problems, and can often turn out to be mis-sold.

More about mis-sold pensions

How does a QROPS work?

How a QROPS works can differ from scheme to scheme, but many will allow a wide choice of investments, and will pay out a tax-free lump sum upon retirement. It may also be possible to name beneficiaries to have any money left in the pension when you die.

Often, they are based offshore from the mainland UK, in places like Malta, Gibraltar, Guernsey or the Isle of Man.

Mis-sold QROPS and pension claims

Much like with the current mis-sold SIPP scandal, an issue with the abuse and mis-use of QROPS pensions is bubbling away, too.

Pensions like these can allow a greater range of investments, but this can also include high-risk investments – ones that sit outside the jurisdiction of the regulators at the FCA, often being based, registered or floated abroad.

This distance from the regulator’s watchful eye automatically raises the risk of the investment, and indeed, many high-risk investments have flopped, collapsed or turned out to be fraudulent, losing their investors hundreds-of-thousands of pounds.

Examples include everything from forestry schemes to overseas property funds.

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Did you invest in a QROPs?

If you invested in a QROPS then you may have been mis-sold.

We’ve seen examples where financial advisers have transferred people’s hard-earned pensions into QROPS schemes, without considering their suitability for either the underlying investments, or their retirement plans, including whether they even wanted to retire abroad!

Provided that your financial adviser was regulated here in the UK, you may be able to make a claim for a mis-sold pension due to negligent financial advice.

Want to know if you can claim?

Want to speak to a specialist?

If you’ve transferred to a QROPS, SIPP or SSAS, have it checked out by our pension claims specialists for FREE